Burlington Coat Factory Looks to Beef Up Online Fulfillment System

Burlington Coat Factory Warehouse Corp., the No. 1 retailer of coats in the United States, has a unique stance on e-commerce: It does not want to draw attention to its online store.

A key reason is a fulfillment system inadequately equipped for e-commerce even though its Web site, burlingtoncoatfactory.com, has been accepting orders since June 2000.

"If you're not a cataloger and haven't had customer pick and pack in place for 10 years, fulfillment is tougher than you might think," said Ginger Atwater, Lebanon, NH-based director of e-business at Burlington Coat Factory, Burlington, NJ.

Burlington expects to fix the problem later this summer and through the fall when it starts designing and implementing a fulfillment system that addresses its needs.

The current system "is a noisy distraction," Atwater said, "and it clearly limits how much we can grow right now, but that's okay because I'm not running into a conflict. My stated goal is not to be another revenue earner for the company. My stated goal is to be a support for bricks-and-mortar [stores]."

Founded in 1972, Burlington targets married women age 35 to 45 and families looking for designer labels. Products such as apparel, footwear, accessories, linen and home-decor items are discounted up to 60 percent, selling at more than 290 stores in 42 states.

But the privately held company is downright conservative in marketing its online store. Even though it collects e-mails from online customers, it has never sent any outbound communications. It also does not have plans for marketing the online store anytime soon.

Only now, the online store is gaining new significance. In response to consumer requests, the company will soon launch bridal, anniversary and birthday registries online -- ahead of the offline variants. An online launch date has not been set. At present, offline stores boast only a baby registry.

Atwater understands that the retailer cannot ignore the elephant in the room. The current method of accepting online orders is as archaic as can be.

For example, the only step currently automated in the online process is relaying the order once it is placed. After that, executives have to run around with checklist in hand and figure out which store has that clothing item or accessory. This is done by e-mail, telephone or fax.

Once the product is located, there is the hassle of assigning tracking numbers, bagging, determining the point of receipt and calculating taxes.

"It's very labor intensive," Atwater admits.

A new, more integrated and automated order-processing and fulfillment system, however, will ease life for Burlington executives responsible for e-commerce.

"It probably won't change where the goods come from, but it'll change the amount of labor involved in tracking them," Atwater said. "What we're doing right now is an enormously labor-intensive process, and that's why it doesn't make sense to try to build the volume [online]."

The new system has to tie in with Burlington's distribution center, store-based inventory and purchase order systems. In addition, the system has to integrate well with Burlington's vendor setup.

"Obviously you can't just buy something off the shelf and say these are the kinds of transactions done this way and everybody else can keep doing his own segments and somehow it will all come together," Atwater said.

Again, in contrast with a lot of offline retailers ironing out the creases in their e-commerce operations, Burlington has decided to create its automated fulfillment system on its own.

"A piece of it we'll work with vendor fulfillment, where we're going to play around with one of the many companies that are starting to move into that space this year," Atwater said. "But, ultimately, I don't think it'll be like EDI or some XML transaction.

"It'll be some sort of industry standard that evolves where everybody who's asking the vendor to ship directly creates this kind of transaction," she said, "and it gets communicated and everybody knows how to grab those and put them in their systems and process orders from there."

Thus, the aim is to source products from company stores or distribution centers or, better still, to get vendors to ship directly.

Until that happens, the status quo at burlingtoncoatfactory.com will continue.

"I do not want to drive any more business than I've already got," Atwater said. "People find us because of our brand. We get traffic and we're doing a very brisk business, and I'm just trying to walk that tight rope until we get the fulfillment system before we open the floodgates."